Questions: 14-24 and 14-51, 17-1 and 17-24
Problems (Show your work.): 14-52, 17-40, and 17-49
Chapter 14:
24. What is the purpose of the dividends received deduction? What corporations are entitled to claim this deduction? What dividends qualify for this deduction? The tax deduction received by a corporation on the dividends paid to it by companies in which it has an ownership stake. Generally Corporation pays taxes on its income before distributing dividends. So if this deduction is not allowed the corporation paying dividend pays taxes, the corporation receiving dividends pays taxes on it again and the shareholders receiving this pays tax again so it leads to triple taxation. U.S. corporations are generally entitled to a deduction for dividends received from certain other domestic corporations.
If the recipient corporation owns less than 20% of the distributor's stock, the recipient corporation is allowed a deduction of 70% of dividends paid out of distributor's tax earnings and profits (E&P). When the recipient of the dividend has at least 20% but less than 80% ownership by vote or value in the distributor, an 80% DRD is allowed under Sec. 243(c). Finally, Sec. 243(a)(3) allows a 100% deduction for "qualifying dividends," when a corporation receives dividends from another corporation that is a member of the same affiliated group.

51. What is the purpose of the reconciliation of taxable income with book income?
Generally, Sec. 446 requires taxable income to be computed under the same method of accounting as the taxpayer uses for its books. However there are differences in the accounting method used for GAAP versus tax....this could be cash method vs. accrual method, depreciation methods, expenses disallowed for tax but recorded in books and so on. Reconciliation of taxable income to book helps to quantify how much of the aggregate book-tax differences